Vendor Analysis: Pegasystems Inc

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Vendor Analysis: Pegasystems Inc. Financial Crime Risk Management Systems: Know Your Customer, 2019 Chartis Research is the leading provider of © Copyright Infopro Digital Services Limited 2019. research and analysis on the global market for All Rights Reserved. risk technology. It is part of Infopro Digital, which owns market-leading brands such as Risk and No part of this publication may be reproduced, WatersTechnology. Chartis’ goal is to support adapted, stored in a retrieval system or transmitted enterprises as they drive business performance in any form by any means, electronic, mechanical, through improved risk management, corporate photocopying, recording or otherwise, without the governance and compliance, and to help clients prior permission of Infopro Digital Services Limited make informed technology and business decisions trading as Chartis Research (‘Chartis’). by providing in-depth analysis and actionable advice on virtually all aspects of risk technology. The facts of this document are believed to be Areas of expertise include: correct at the time of publication but cannot be guaranteed. Please note that the findings, • Credit risk. conclusions and recommendations that Chartis • Operational risk and governance, risk and delivers will be based on information gathered in compliance (GRC). good faith, whose accuracy we cannot guarantee. • Market risk. Chartis accepts no liability whatever for actions • Asset and liability management (ALM) and taken based on any information that may liquidity risk. subsequently prove to be incorrect or errors in our • Energy and commodity trading risk. analysis. See ‘Terms and conditions’. • Financial crime including trader surveillance, anti- fraud and anti-money laundering. RiskTech100®, RiskTech Quadrant®, FinTech • Cyber risk management. Quadrant™ and The Risk Enabled Enterprise® are • Insurance risk. Registered Trade Marks of Infopro Digital Services • Regulatory requirements including Basel 2 and Limited. 3, Dodd-Frank, MiFID II and Solvency II. Unauthorized use of Chartis’ name and trademarks Chartis is solely focused on risk and compliance is strictly prohibited and subject to legal penalties. technology, which gives it a significant advantage over generic market analysts.

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1. Report context 5

2. Quadrant context 7

3. Vendor context 10

4. Methodology 14

5. Further reading 17

Figure 1: Chartis RiskTech Quadrant® for KYC solutions, 2019 8

Figure 2: Pega’s regulatory rules framework 11

Figure 3: Overview of Pega CLM/KYC 12

Table 1: Completeness of offering – Pega (KYC solutions, 2019) 9

Table 2: Market potential – Pega (KYC solutions, 2019) 9

Table 3: Pega – company information 10

Table 4: Evaluation criteria for Chartis’ 2019 KYC report 15

This Vendor Analysis is based on the Chartis quadrant report Financial Crime Risk Management Systems: Know Your Customer; Market Update and Vendor Landscape, 2019 (published in October 2019). This section summarizes the key theses in that report; subsequent sections take a detailed look at Pega’s quadrant positioning and scoring, and Chartis’ underlying opinion and analysis.

Key thesis while at the front end KYC investigators access this information from a single interface. Financial institutions (FIs) have long sought a ‘single view’ of their customers that enables For many institutions, an integrated view is analysts to access all the relevant information something of a ‘holy grail’, reducing the time KYC about an individual in one place. For many, a analysts take to manually piece together required universal single view across all operations remains information – such as corporate structures or beyond reach, but a more integrated customer negative news items – from third-party sources. view – one that unifies pertinent information In addition, by storing necessary information into a single-access system and interface – is in collocated database tables or databases, an now achievable. integrated view can make an FI’s KYC system more scalable. By integrating data storage Know Your Customer (KYC) is an entity-centric and access, FIs can do more with less in their process that requires and produces large volumes KYC operations. of information on each customer. As such, it can form a useful foundation on which to develop an What’s more, implemented sensibly, an integrated view, serving not only financial crime integrated customer view can benefit FIs in parts compliance but other areas of the business of the business beyond KYC, in financial crime too, in areas such as credit risk and customer compliance and other operational areas. A single relationship management. reference entity for KYC could help FIs identify transactions that represent potential money But achieving the single view will require careful laundering or sanctions breaches, for example. By thought and planning. To set its scope and design, maintaining and updating a single source of truth FIs must consider the different KYC requirements around a customer’s identity and attributes, FIs can of each business line, and develop a realistic scope reduce false positives in their screening processes. and a straightforward data storage architecture. And an extensible KYC customer infrastructure The roles of components – and services – in this can also allow FIs to reuse data in non-compliance will also be key. areas, notably product marketing and credit risk.

For vendors hoping to sell into this evolving But developing the functionality required for a market, integration should be a top priority, as more integrated customer view has not proved should deepening their services capabilities easy, and the road to the ‘holy grail’ has been a and – where feasible – augmenting their long and difficult one. Today, however, with the solutions through partnerships with advent of graph-based analytical techniques, and complementary vendors. as FIs continue to digitalize their front and middle offices, they are more able to construct a usable and useful integrated customer view for KYC, with Demand-side takeaways a more realistic scale and focus.

Toward the ideal: the integrated customer KYC at the core of integration – but beware view the business lines…

For some time, FIs have pursued a more At its heart, KYC is an entity-centric process integrated customer view – sometimes termed that requires – and produces – large volumes the ‘single view’ – for KYC. Such a view would of information about each customer. As such, it maintain all information on a given entity in a single forms a foundation upon which FIs can develop an repository and expose it through a single interface. integrated view to serve business divisions outside In the back end, a single database or structured KYC and more general financial crime compliance. federation of databases holds all relevant data, A well-structured implementation of an integrated

5 | Vendor Analysis: Pegasystems Inc.: Know Your Customer Solutions, 2019 © Copyright Infopro Digital Services Limited 2019. All Rights Reserved view will allow FIs to reuse KYC data in multiple • Distribution partnerships. KYC components areas. By deploying a single data store with a are often delivered ‘white-boxed’ inside a third- defined-access application programming interface party solution. Maintaining strong distribution (API), FIs can enable other risk and business channels is thus vital for component vendors, functions within the firm to access KYC data for particularly those producing core elements such their own use. as entity resolution engines.

If they take a realistic approach, FIs can establish • Implementation arms/partnerships. Given the an integrated view that can save them time and heterogeneity of FIs’ technical infrastructures, money. But they must expend the necessary weaving components together into a full KYC time and resources ahead of the project in order stack requires deployment knowledge that to guarantee its success. Importantly, data some vendors may lack. Similarly, though to a infrastructures for each business line should lesser degree, packaged KYC solutions require remain separate, with a common API governing some degree of customization to fit their data access by the front end. Separate analyst environment. Larger vendors have built their in- interfaces that make up the integrated view house implementation capacities, while others using the relevant data by business line (such as have sought partnerships with professional address history and risk score for retail customers, services firms. or ownership structure and negative news for corporate clients) will boost scalability and reduce • Outsourcing (which itself comes in two types): unnecessary data flow. oo Business process outsourcing. BPO remains To set the scope and design of any integrated widespread among those FIs without in-house view, FIs must consider the different KYC KYC staff. requirements of each business line. Each business line’s respective integrated view must oo Manual review. Manual review underpins then account for these needs. At the back end, much of the advanced analytics used for for example, a high-throughput data store is a functions like identity verification. necessary foundation for a retail KYC integrated view, while at the front end, only corporate KYC Against this background, and based on our analysis and wealth management KYC interfaces need of the integrated customer view and the vendor to display information about ultimate beneficial landscape, we believe that vendors negotiating the owners (UBOs). KYC space should do the following:

• Make integration a top priority. Supply-side takeaways • Build internal services arms. As we explored in the previous iteration of this update report1, the market for KYC solutions • Develop and deepen their services capabilities. continues to move toward a component-centric model. Against this background vendors have • Partner with other vendors. proliferated, each offering a specific piece of the KYC stack or specializing in a specific area, and the market has fragmented along functional as well as business lines.

The complexity and diversity of the market has greatly increased the influence ofservice capabilities on vendors’ success. Service functions – whether provided by vendors or professional services firms – are the glue that binds together the necessary components of a KYC implementation. They play critical roles in the following three ways:

1 ‘Financial Crime Risk Management Systems: Know Your Customer; Market Update 2018’

Introducing the Chartis RiskTech technology users to select only those vendors with ® the highest ratings or other designation. Chartis Quadrant Research’s publications consist of the opinions of its research analysts and should not be construed This section of the report contains: as statements of fact.

• The Chartis RiskTech Quadrant® for KYC How are quadrants used by technology vendors? solutions for 2019. Technology vendors can use Chartis’ quadrants to • An examination of Pegasystems Inc.’s achieve several goals: (Pega’s) positioning and scores as part of Chartis’ analysis. • Gain an independent analysis and view of the provider landscape in a specific area of risk, • A consideration of how the quadrant reflects the financial and/or regulatory technology. broader vendor landscape. • Assess their capabilities and market positioning Summary information against their competitors and other players in the space. What does the Chartis quadrant show? • Enhance their positioning with actual and The RiskTech Quadrant® uses a comprehensive potential clients, and develop their go-to- methodology that involves in-depth independent market strategies. research and a clear scoring system to explain which technology solutions meet an organization’s In addition, Chartis’ Vendor Analysis reports, like needs. The RiskTech Quadrant® does not simply this one, offer detailed insight into specific vendors describe one technology option as the best KYC and their capabilities, with further analysis of their solution; rather it has a sophisticated ranking quadrant positioning and scoring. methodology to explain which solutions are best for specific buyers, depending on their implementation strategies. Chartis Research RiskTech ® The RiskTech Quadrant®’s proprietary Quadrant for KYC solutions, methodology is developed specifically for the risk 2019 technology marketplace. It takes into account vendors’ product, technology and organizational Figure 1 illustrates Chartis’ view of the KYC vendor capabilities. Section 4 of this report sets out the landscape, highlighting Pega’s position. generic methodology and criteria used for the RiskTech Quadrant®.

How are quadrants used by technology buyers?

Chartis’ RiskTech and FinTech quadrants provide a view of the vendor landscape in a specific area of risk, financial and/or regulatory technology. We monitor the market to identify the strengths and weaknesses of different solutions, and track the post-sales performance of companies selling and implementing these systems. Users and buyers can consult the quadrants as part of their wider research when considering the most appropriate solution for their needs.

Note, however, that Chartis Research does not endorse any vendor, product or service depicted in its research publications, and does not advise

7 | Vendor Analysis: Pegasystems Inc.: Know Your Customer Solutions, 2019 © Copyright Infopro Digital Services Limited 2019. All Rights Reserved Figure 1: Chartis RiskTech Quadrant® for KYC solutions, 2019 Chartis RiskTech Quadrant® for KYC Solutions, 2019

Best of breed Category leaders

Reﬁnitiv Bureau van Dijk* KYC Global Technologies RDC Pegasystems Inc. InfrasoftTech Accuity LexisNexis Risk Solutions TENTIAL IBM Fenergo Oracle NICE Actimize T P O IHS Markit GBG Arachnys Quantexa Appway Fiserv AML Partners SAS iMeta ARK E Onﬁdo BAE Systems M Equiniti Pitney Bowes Manipal Group

Know Your Customer

Point solutions Enterprise solutions

COMPLETENESS OF OFFERING * A Moody’s Analytics company Source:*A Moody’s Chartis AnalyticsResearch company The RiskTech Quadrant is a trademark of Infopro Digital Services Limited (‘Infopro Digital’) and is used herein with permission. All rights reserved. This graphic was published by Infopro Digital as part of a larger research document Quadrant(’Financial Crime Riskdynamics Management Systems: Know Your Customer;• Business-line Market Update vendors and thatendor specialize Landscape, in providing2019’, published in October 2019) and should be evaluated in the context of the entire document. Infopro Digital does not endorse any vendor, product or service depicted in its researchend-to-end publications, KYC and suitesdoes not for advise niche technology operations, users to Generalselect only quadrant those vendors takeaways with the highest ratings or other designation.such as wealthInfopro Digital’smanagement publications or retail consist KYC of in the opinions of its research analysts and should not be construed asdeveloping statements economies. of fact. Infopro Digital disclaims all warranties, expressed or implied, with respect to this research, including any warranties of suitability or fitness for a Theparticular KYC marketpurpose. is diverse and fragmented, comprising component and business-line • Enterprise financial crime vendors that provide specialists. Amid this, three broad groups make up KYC capabilities as part of a financial crime suite the KYC quadrant: that may also encompass anti-fraud and trade surveillance capabilities. • Component-focused vendors that specialize in providing one functional element of the Vendor positioning in context – KYC process, such as entity resolution or completeness of offering workflow engines. Pega offers the strongest workflow capabilities currently available for KYC and customer

8 | Vendor Analysis: Pegasystems Inc.: Know Your Customer Solutions, 2019 © Copyright Infopro Digital Services Limited 2019. All Rights Reserved onboarding. A comprehensive engine for defining Table 1: Completeness of offering – Pega (KYC solutions, 2019) workflows and integrating them with other applications allows compliance teams to rapidly Completeness of offering criterion Coverage design, prototype and implement procedures across the KYC process, a task simplified further by Pega’s ‘no code’ approach. Quarterly rules Entity resolution Medium updates issued to all users guarantee compliance with new rules and regulations. Reporting and dashboarding Low

Pega’s sophisticated data management underpins KYC risk scores High this functionality. The company maintains a global master profile that holds information on an entity’s Customer profile enrichment with additional data Medium products and KYC status, as well as relationships within and between entities. It also integrates Customer onboarding High with enterprise databases, eliminating the need to replicate and synchronize data stores. Workflow engine High

Additional features include: Source: Chartis Research

• Optical character recognition for customer documents. Table 2 shows Chartis’ rankings for Pega’s coverage against each of the market potential • Information retrieval using robotic process criteria. automation (RPA).

• Pre-built entity relationships, which enable firms Table 2: Market potential – Pega (KYC solutions, 2019) to onboard related customers in parallel. Market potential criterion Coverage Table 1 shows Chartis’ rankings for Pega’s coverage against each of the completeness of offering criteria. Customer satisfaction Medium

Vendor positioning in context – market Market penetration High potential Growth strategy Medium Pega holds a solid share of the market for KYC solutions, due to its system’s ability to meet Financials High end users’ needs and integrate with additional components of a KYC implementation. Two of the Source: Chartis Research Big Four consulting firms use Pega’s KYC solution in their KYC stack implementations and/or KYC managed services. This dual appeal enables cross- business-line implementations for multinational FIs and off-the-shelf functionality for smaller FIs. Pega also provides the backbone for multiple regional KYC utilities.

Pega’s extensive partnerships with companies like Bloomberg and Avox further boost the potential of the firm’s KYC offering by facilitating the ingestion of third-party data. In addition, the firm’s high level of research and development spending in areas like distributed ledger technology and RPA, as well as its provision of quarterly rule updates, augment a KYC solution with already strong market appeal.

Overview of relevant solutions/ accounts, and geographies, including related parties. It also manages complex direct/indirect capabilities and parent/child relationships to ensure re-use and efficiency in due diligence across jurisdiction and Table 3 gives an overview of Pega and its due diligence obligations. KYC solution. Pega CLM, an enterprise application with specialized features for corporate and investment Vendor leading practices banking, business banking, wealth and personal banking, provides an operating model, process Pega KYC and CLM backbone and case management. The solution manages all aspects of onboarding, including KYC, Pega KYC is an integral yet distinct part of Pega credit, legal, tax and documentation services, CLM. Pega KYC maintains a Global Master Profile with integrated reporting, and front-to-back office across all lines of business (entities and underlying transparency across digital channels, prioritization parties with pre-built dependencies), products, and re-use.

Table 3: Pega – company information

Company Pegasystems Inc.

Headquarters Cambridge, Massachusetts, US.

Other offices Pega has 38 locations across Asia (13), Europe (12), North America (12), and South America (1).

Description Pega is a provider of cloud software for customer engagement and improved operational performance. The company’s users rely on its AI-powered software to optimize customer interactions on any channel, while the company’s low-code application development platform allows enterprises to build and evolve apps to meet their customer and employee needs and drive digital transformation globally. For more than 35 years, Pega has offered its clients solutions to achieve better customer satisfaction, lower costs, and increased customer lifetime value.

Solution Pega has developed its solution through collaboration with global banking clients, consulting and legal firms, and data providers. Pega CLM provides an out-of-the-box operating model, case management, rules engine and process backbone integrated with the company’s KYC solution, and is designed for multijurisdictional, multiproduct onboarding and front-to-back office transparency.

Pega KYC is a rules-driven application that has evolved over the last 10 years. The firm’s KYC Regulatory Rules engine covers global regulatory rules with pre-built logic for AML/CFT, FATCA/ CRS, MiFID, Dodd-Frank, and EMIR,2 based on factors such as booking entity, geography, line of business, percentage of ownership, customer type, and risk. Designed as an enterprise- wide solution, Pega KYC digitizes global and regional due diligence requirements, risk rating, dashboards, and complex entity management, and provides a KYC rules configuration portal.

Source: Pega

2 Anti-Money Laundering/Combating the Financing of Terrorism; Foreign Account Tax Compliance Act/Common Reporting Standard; Markets in Financial Instruments Directive; European Market Infrastructure Regulation.

10 | Vendor Analysis: Pegasystems Inc.: Know Your Customer Solutions, 2019 © Copyright Infopro Digital Services Limited 2019. All Rights Reserved Third-party integrations an international team of lawyers, ex-regulators and policymakers, many of whom have worked Both applications integrate with screening directly with primary regulators and global providers Thomson Reuters World-Check and banking institutions. Equifax to screen for global sanctions, politically exposed persons (PEPs) and negative media. The The key features of Pega KYC and Pega CLM are Equifax integration also includes ID verification, outlined below and illustrated in Figure 3. fraud verification and credit check, while integration with biometric identity verification tool • Onboarding and KYC. ElectronicID allows identity verification through biometric matching of video images and licenses oo Front-to-back office onboarding and or passports. The solution also integrates with IHS digitized KYC. Markit’s kyc.com, Clarient and Avox to provide due diligence documentation and information. oo Cross-line-of-business application (corporate/ institutional, wealth, asset management Regulatory coverage and retail).

The regulatory rulesets Pega has developed help oo Transparency and control, front to back office firms comply with KYC due diligence requirements across channels. including: AML/CFT, FINRA 2111, US Dodd-Frank, EMIR, MiFID II, IIROC, FATCA, and CRS3 (see oo Inherent AI and robotics. Figure 2). The solution is designed to be rapidly deployed by large global banks with zero code. oo Speed and re-use. To develop and maintain these out-of-the-box regulatory rulesets, Pega has partnered with oo Globally scalable.

Figure 2: Pega’s regulatory rules framework

Source: Pega

3 Financial Industry Regulatory Authority; Investment Industry Regulatory Organization of Canada

Source: Pega

oo Multi-jurisdictional; multi-product onboarding. • Risk-rating engine that adjusts risk based on changes in information and answers to due • Zero-code KYC and onboarding. diligence questions.

oo KYC regulatory rules engine with automated • Master customer profiles for customers quarterly regulatory rule updates covering and related parties that track completed due 60 jurisdictions. diligence, reusing it where possible.

Key features • Out-of-the box connectors to kyc.com, Clarient, Equifax InterConnect, Thomson Reuters World- Pega KYC Check, Avox, Bloomberg, and ElectronicID.

• Fully integrated with Pega CLM, this offering • Provides overall command and control provides a set of pre-configured KYC due visibility and a single reusable audit repository diligence rules covering AML/CFT, FATCA, CRS, for compliance. EMIR, MiFID II, and Dodd Frank. It also enables global coverage of any type of KYC rules on a Pega CLM subscription basis. • A strategic application based on the Pega Infinity • Regulatory rules engine. platform, with underlying technology that is designed to scale. • Regulatory rules management portal that allows for rapid zero-code updates to due • Underpinning the CLM application are diligence questions. unified case management, a rules engine, AI, workflow, and digital automation, allowing • Out-of-the-box functionality with automated for parallel processing and orchestration refresh and remediation.

12 | Vendor Analysis: Pegasystems Inc.: Know Your Customer Solutions, 2019 © Copyright Infopro Digital Services Limited 2019. All Rights Reserved with full transparency across front- to back- office processes.

• Pega’s rules are not hard-coded – business users can change and update rules in Pega CLM and render the UI/UX rapidly with no code.

• Pega provides quarterly regulatory rule updates sourced from a global team of experts.

• Configuration is rapid using Pega’s low-code approach; extending to new lines of business, jurisdictions and departments maximizes reuse.

• Pega helps FIs take a more customer-centric approach, offering a master folder for each entity, subsidiary and related party, including dependencies for parent/child cases. This ensures re-use globally and allows banks to understand their relationship with a customer regardless of jurisdiction and line of business.

• Ability to track and satisfy documentary and data requirements to ensure consistent expectations and minimize rework with pre-built logic.

• Can coordinate many participating teams and users in parallel.

• Offers a product database to speed up initial implementations and extensions to new product and service areas.

• Automatically retrieves information from other sales tools and legacy systems where data is needed to drive cases to resolution.

Overview the last iteration. For this research we included specialists in wealth management KYC, as well Chartis is a research and advisory firm that as operations and workflow vendors breaking into provides technology and business advice to the the market. global financial services industry. Chartis provides independent market intelligence regarding market dynamics, regulatory trends, technology Briefing process trends, best practices, competitive landscapes, market sizes, expenditure priorities, and mergers We conducted face-to-face and/or web-based and acquisitions. Chartis’ RiskTech and FinTech briefings with each vendor4. During these Quadrants™ reports are written by experienced sessions, Chartis experts asked in-depth, analysts with hands-on experience of selecting, challenging questions to establish the real developing and implementing financial technology strengths and weaknesses of each vendor. solutions for a variety of international companies in Vendors provided Chartis with: a range of industries including banking, insurance and capital markets. The findings and analyses • A business update – an overview of solution in our quadrant reports reflect our analysts’ sales and client satisfaction. considered opinions, along with research into market trends, participants, expenditure patterns, • A product update – an overview of relevant and best practices. solutions and R&D roadmaps.

Chartis seeks to include RiskTech and FinTech • A product demonstration – key differentiators vendors that have a significant presence in a given of their solutions relative to those of their target market. The significance may be due to competitors. market penetration (e.g., a large client base) or innovative solutions. Chartis uses detailed ‘vendor In addition to briefings, Chartis used other third- evaluation forms’ and briefing sessions to collect party sources of data, such as conferences, information about each vendor. If a vendor chooses academic and regulatory studies, and publically not to respond to a Chartis request for information, available information. Chartis may still include the vendor in the report. Should this happen, Chartis will base its opinion on direct data collated from technology buyers and Evaluation criteria users, and from publicly available sources. We develop specific evaluation criteria for Chartis’ research clients include leading financial each piece of quadrant research from a broad services firms and Fortune 500 companies, leading range of overarching criteria, outlined below. By consulting firms and financial technology vendors. using domain-specific criteria relevant to each The vendors evaluated in our quadrant reports can individual risk, we can ensure transparency in our be Chartis clients or firms with whom Chartis has methodology, and allow readers to fully appreciate no relationship. the rationale for our analysis. The specific criteria used for KYC are shown in Table 4. Chartis evaluates all vendors using consistent and objective criteria, regardless of whether or Completeness of offering not they are Chartis clients. Chartis does not give preference to its own clients and does not request • Depth of functionality. The level of compensation for inclusion in a quadrant report, sophistication and amount of detailed features nor can vendors influence Chartis’ opinion. in the software product (e.g., advanced risk models, detailed and flexible workflow, domain- specific content). Aspects assessed include: Selection criteria innovative functionality, practical relevance of features, user-friendliness, flexibility, and To reflect the changing KYC market, this year’s embedded intellectual property. High scores are report assessed a broader vendor landscape than given to those firms that achieve an appropriate

4 Note that vendors do not always respond to requests for briefings; they may also choose not to participate in the briefings for a particular report.

14 | Vendor Analysis: Pegasystems Inc.: Know Your Customer Solutions, 2019 © Copyright Infopro Digital Services Limited 2019. All Rights Reserved balance between sophistication and user- Table 4: Evaluation criteria for Chartis’ 2019 KYC report friendliness. In addition, functionality linking risk to performance is given a positive score. Completeness of offering Market potential • Breadth of functionality. The spectrum of requirements covered as part of an enterprise • Entity resolution • Customer satisfaction risk management system. This will vary for each subject area, but special attention will • Reporting and dashboarding • Market penetration be given to functionality covering regulatory requirements, multiple risk classes, multiple • KYC risk scores • Growth strategy asset classes, multiple business lines, and multiple user types (e.g. risk analyst, business • Customer profile enrichment • Financials manager, CRO, CFO, Compliance Officer). with additional data Functionality within risk management systems and integration between front-office (customer- • Customer onboarding facing) and middle/back office (compliance, supervisory and governance) risk management • Workflow engine systems are also considered. Source: Chartis Research

• Data management and technology infrastructure. The ability of risk management Market potential systems to interact with other systems and handle large volumes of data is considered to • Business model. Includes implementation be very important. Data quality is often cited and support and innovation (product, business as a critical success factor and ease of data model and organizational). Important factors access, data integration, data storage, and include size and quality of implementation team, data movement capabilities are all important approach to software implementation, and post- factors. Particular attention is given to the use sales support and training. Particular attention is of modern data management technologies, given to ‘rapid’ implementation methodologies architectures and delivery methods relevant to and ‘packaged’ services offerings. Also evaluated risk management (e.g., in-memory databases, are new ideas, functionality and technologies complex event processing, component-based to solve specific risk management problems. architectures, cloud technology, and Software as Speed to market, positioning, and translation a Service). Performance, scalability, security and into incremental revenues are also important data governance are also important factors. success factors in launching new products.

• Risk analytics. The computational power of the • Market penetration. Volume (i.e. number of core system, the ability to analyze large amounts customers) and value (i.e. average deal size) are of complex data in a timely manner (where considered important. Rates of growth relative relevant in real time), and the ability to improve to sector growth rates are also evaluated. Also analytical performance are all important factors. covers brand awareness, reputation, and the Particular attention is given to the difference ability to leverage current market position to between ‘risk’ analytics and standard ‘business’ expand horizontally (with new offerings) or analytics. Risk analysis requires such capabilities vertically (into new sectors). as non-linear calculations, predictive modeling, simulations, scenario analysis, etc. • Financials. Revenue growth, profitability, sustainability, and financial backing (e.g. the ratio • Reporting and presentation layer. The ability of license to consulting revenues) are considered to present information in a timely manner, the key to scalability of the business model for risk quality and flexibility of reporting tools, and ease technology vendors. of use, are important for all risk management systems. Particular attention is given to the • Customer satisfaction. Feedback from ability to do ad-hoc ‘on-the-fly’ queries (e.g., customers is evaluated, regarding after-sales ‘what-if’ analysis), as well as the range of ‘out of support and service (e.g. training and ease of the box’ risk reports and dashboards. implementation), value for money (e.g. price to functionality ratio) and product updates (e.g. speed and process for keeping up to date with regulatory changes).

15 | Vendor Analysis: Pegasystems Inc.: Know Your Customer Solutions, 2019 © Copyright Infopro Digital Services Limited 2019. All Rights Reserved • Growth strategy. Recent performance is Best-of-breed evaluated, including financial performance, new product releases, quantity and quality of • Best-of-breed providers have best-in-class point contract wins, and market expansion moves. solutions and the ability to capture significant Also considered are the size and quality of market share in their chosen markets. the sales force, sales distribution channels, global presence, focus on risk management, • They are often distinguished by a growing client messaging, and positioning. Finally, business base, superior sales and marketing execution, and insight and understanding, new thinking, a clear strategy for sustainable, profitable growth. formulation and execution of best practices, and High performers also have a demonstrable track intellectual rigor are considered important. record of R&D investment, together with specific product or ‘go-to-market’ capabilities needed to deliver a competitive advantage. Quadrant construction process • Because of their focused functionality, best- Chartis constructs its quadrants after assigning of-breed solutions will often be packaged scores to vendors for each component of the together as part of a comprehensive enterprise Completeness of Offering and Market Potential risk technology architecture, co-existing with criteria. By aggregating these values, we produce other solutions. total scores for each vendor on both axes, which are used to place the vendor on the quadrant. Enterprise solutions

Definition of quadrant boxes • Enterprise solution providers typically offer risk management technology platforms, Chartis’ quadrant reports do not simply describe combining functionally rich risk applications with one technology option as the best solution in comprehensive data management, analytics a particular area. Our ranking methodology is and BI. designed to highlight which solutions are best for specific buyers, depending on the technology they • A key differentiator in this category is the openness need and the implementation strategy they plan and flexibility of the technology architecture and a to adopt. Vendors that appear in each quadrant ‘toolkit’ approach to risk analytics and reporting, have characteristics and strengths that make them which attracts larger clients. especially suited to that particular category, and by extension to particular users’ needs. • Enterprise solutions are typically supported with comprehensive infrastructure and service Point solutions capabilities, and best-in-class technology delivery. They also combine risk management • Point solutions providers focus on a small content, data and software to provide an number of component technology capabilities, integrated ‘one stop shop’ for buyers. meeting a critical need in the risk technology market by solving specific risk management Category leaders problems with domain-specific software applications and technologies. • Category leaders combine depth and breadth of functionality, technology and content with the • They are often strong engines for innovation, required organizational characteristics to capture as their deep focus on a relatively narrow significant share in their market. area generates thought leadership and intellectual capital. • They demonstrate a clear strategy for sustainable, profitable growth, matched with • By growing their enterprise functionality and best-in-class solutions and the range and utilizing integrated data management, analytics diversity of offerings, sector coverage and and Business Intelligence (BI) capabilities, financial strength to absorb demand volatility in vendors in the point solutions category can specific industry sectors or geographic regions. expand their completeness of offering, market potential and market share. • They will typically benefit from strong brand awareness, a global reach, and strong alliance strategies with leading consulting firms and systems integrators.

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For all these reports, see www.chartis-research.com